7 ms·

1. Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution nec

1. Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution necessary. 2. For landlords who cannot sustain the loss of cash flow, offer to buy them out at market price and then hire them as property managers for their previously owned properties. With essentially zero overhead, you've eliminated small business's first or second largest expense (payroll and rent). If they still can't make payroll, it's not a super huge deal since those employees also have their rent frozen. Now the economy can hibernate. When we're ready to resuscitate it, do a direct stimulus check as you reopen businesses. Let money start flowing without any component going to rent for some amount of time until we're back on solid footing.

hpoe 7y ago
So I know a guy that he bought some real estate he owns 3 properties I think. He isn't a millionaire just a software engineer working the 9-5 and the properties exist mostly to help him prepare for retirement. Now he has some money set aside so that if one of his properties goes dormant he can cover it for a while, but if he were to lose all three of them at the same time. That would be bad. Then you suggest the government can just buy him out at market rates. Who decides what the market rate is? What if the government decides to value the property for $50,000 less than it is worth? Well suddenly he has just had $150,000 taken from him by the government. When things restabiloxe what do we do then? The government owns tons of housing? Who is going to manage and administer that? If they dump them than all that you've done is transferred the properties from small owners to massive multi-million dollar firms that managed to take the hit. What about people who got laid off and still don't have a job after it is over? Because it was a result of the coronavirus do we just continue to say it's okay don't pay rent? If we do that guarantee a year from now tons of properties won't be paying rent still. It sounds like an easy and simple fix but it is usually more complicated than that and drastic decisions made will often have downsteam effect for years and decades that we can't see now.
- ethanbond 7y ago
  As far as pricing: simply purchase the properties for whatever their value was last declared on tax forms. Can even add 5-10% for good measure. You lowballed the government to decrease tax burden? No problem, that’s the price you get. This isn’t an anti-millionaire plot, so it doesn’t matter much what he earns. This is a hibernate-then-stimulate plot. We cannot hibernate if businesses and individuals are getting absolutely gutted at the end of each month. We cannot stimulate if stimulus checks are going directly into landlords’ pockets. After this is over, yes, either the government can keep it (as Singapore does) or even sell them back, giving preference to the original owners at the original price (who had been kept employed throughout the hibernation). The land itself is not charging landlords to hold it, so landlords don’t need to be charging tenants to exist on it (except mortgages/taxes, which would be frozen).
  - JMTQp8lwXL 7y ago
    In some states (e.g., California) the taxed value is not equal to the market value. Especially for home purchases made decades ago.
    - benrbray 7y ago
      Sounds like a problem that should be fixed by setting the tax value equal to market value.
      - JMTQp8lwXL 7y ago
        Prior to 1978, that was indeed the case. Rising property values were kicking seniors on fixed incomes out of their homes, then Prop 13 was passed.
- baby 7y ago
  This is the problem when people start treating real estate as an investment when it should be a human right.
  - aserafini 7y ago
    I think the problem is individuals treating real estate as a risk free asset (it’s not) and our cultural acceptance of retail investors placing highly leveraged bets (via mortgages) on those assets. If you have a bad portfolio (100% real estate) and you’re highly leveraged, you’re going to have a bad time.
    - WWLink 7y ago
      This sounds most correct to me. A lot of landlords out here see their houses as ATMs and milk them for all its worth. You can't even "take your business elsewhere" because they're all janky and in bad need of a remodel.
- ipnon 7y ago
  The fairest solution would be for tenants to pay as much as they can instead of the government declaring that all tenants in the nation are incapable of paying the entirety of their rent for the foreseeable future (because this is obviously false, some tenants can pay all or their rent, some of them can pay some of it). You are correct here. The only caveat is that ownership of financial assets including real estate is inherently risky. A monthly rent to retain the right to use a financial asset is in many ways the opposite, both for the reasons of not being liable for the underlying asset in addition to the variety of tenant rights in this county. Your guy assumed these risks when he purchased his 3 properties. An abhorrent attitude is emerging in the United States among the ownership class. They feel they are entitled to steady, eternal returns on their financial assets, equity, real estate or otherwise. Concurrently the labor class has no guarantee of a right to steady, eternal income through sale of their time and energy. In nature, ownership of anything is no guarantee of receiving from it productive benefits. We would be wise as Americans to remember this when we expect anything more from the civil society we inhabit.
  - deleted 7y ago
    [deleted]
- grecy 7y ago
  The comment you replied to suggested freezing all mortgage and rent. So the guy guy know doesn't have to pay the mortgages on the properties and his tenants don't have to pay rent. No need to sell them at all, everything is just on hold.
  - pfranz 7y ago
    Mortgages seem a lot simpler to me. You just keep accruing interested and add payments onto the end of the mortgage. With rent there are a few issues--you just get to live there for free? Do you add rent onto the backend (good luck collecting on that)? If you own a property and are renting it out there are other expenses rent covers; sometimes it pays for utilities, it covers insurance, property tax, and maintenance, sometimes it pays the salaries of a property manager or lawn service. One would hope that mortgages are the largest cost and other services could be negotiated with. I think eliminating property tax is infeasible for almost all areas. Depending on the area, that's where a majority of the local government's income comes from and most local governments are not allowed to run a deficit. However, like income taxes, many areas are delaying the due date.
    - TheSpiceIsLife 7y ago
      > keep accruing interested Why? Why does some particular type of business get a free pass to profit from this scenario?
      - pfranz 7y ago
        Loan deferments are already a common practice. Even if you came up with a different accommodation, the point is that mortgages are significantly simpler to address compared to rent.
        TheSpiceIsLife 7y ago
        I keep seeing people claim that loans should keep accruing interest when people have had their livelihoods evaporate by government degree. My point is: why ya’ll keep saying that? Just freeze the loans. Should be a simple as fuck to implement.
- pfranz 7y ago
  Item #1 was to cancel mortgage payments and property taxes. This person would only be paying for things like maintenance contracts, lawn service, and insurance. I would think those would be relatively low and all of them are very likely negotiable right now. I know many are proactively reaching out to accommodate. Much like Japan subsidizing 100% of salaries, there would be a timetable for it to sunset since it's obviously can't happen indefinitely. Not that I think that idea is 100% feasible (I don't think states and counties can function without property taxes), but losing an investment seems like a better option than losing where you live. Ideally, "the market" would fix itself. Nobody has leverage here. It's not like there are new tenants waiting to move in and pay rent. So everyone is motivated to renegotiate--unfortunately, the volume of renegotiations often means enforcing silly policies like "evict everyone immediately" might get used. This happened in 2008. I, too, am worried about consolidation. I know that will happen without any action, and will likely happy if the government does.
- zebnyc 7y ago
  If I buy a stock at $100 with the assumption that there is an upside that it could go to $1000 but the lowest it could go to is $95 cause the government will step in, that is practically a risk free investment. If there is a lesson to be learnt from this crisis and the 2008 housing crash, it is to invest in real estate as a risk free investment. Housing is too big to fail.
  - chii 7y ago
    do you know how many people lost their houses during the GFC? housing has never been bailed out. Banks have been bailed out for lending money as mortgages for people who couldn't have ever paid up.
- Pfhreak 7y ago
  This person has equity in three properties. Are they equally invested elsewhere or did they over leverage their current properties? Because something isn't adding up - either they put all their chips on one number (real estate) or they are playing with a lot more chips than you are suggesting.
anonytrary 7y ago
> Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution necessary. This is something I'm confused about. The US government goes through great lengths to support constituents with an array of welfare programs, but goes through equally great lengths to take a lot of that money back from people. It seems awfully inefficient, and supporting those diametric systems seems like an awful waste of time, energy, and money.
- hanniabu 7y ago
  It helps increase the income inequality and class gap, so some would say it's very efficient.
- dillonmckay 7y ago
  It is a means of control and creates white-collar jobs.
- granshaw 7y ago
  Lobbying and corporate interests has hollowed out our government, simple as that. Great for the markets though, which in turn causes those few who make it into the investing class to vote for more of the same, creating a vicious cycle.
naveen99 7y ago
Just cancelling property taxes would fix rent and protect property values. Rent to property value ratios are much lower without property taxes. Also home ownership rates are much higher without property taxes.
- jandrewrogers 7y ago
  That depends on where you live. Where I live (Seattle) my property taxes are <1% of property value, but rents are quite high. My property tax bill is probably around 15% of the market clearing rent for my place. Rent would still be damn high.
  - naveen99 7y ago
    1% is still very high, compared to 0 in india, U.K., many other places. Rent in india is like 1-2% of property value / year. In texas with 2.5% property tax, rent is closer to 8%. Even Seattle is probably close to 3% / year. Rent is basically property tax + interest rate + maintenance - inflation in property values.
dba7dba 7y ago
>> 2. For landlords who cannot sustain the loss of cash flow, offer to buy them out at market price and then hire them as property managers for their previously owned properties. But who's going to decide on the value? And pay for it? If the goal is to help US population, why not just use that money and give to others with less wealth? Because money given to those without savings will definitely be put back into the economy. A big chunk of money given to one person will most likely sit in a savings acct or something like it...
- ethanbond 7y ago
  Price is set by the declared value of the land on the most recent tax filings. Add 10% for safe measure. This would cost nowhere close to the trillions of dollars that we’re printing to hand out to large corporations, banks in transaction fees, and then, of the little money that does make its way to consumers, the vast majority of that going straight to landlords.
- WalterBright 7y ago
  The wealthy have all their money invested in the economy, not Scrooge McDuck cash vaults.
jonahbenton 7y ago
Many people think this way. It is intuitive. It is also mistaken. It is simply not how this incredibly enormous, incredibly complex system has been set up. What is underappreciated is that in contrast to 2008, which was a financial system crisis- what we have now is implicitly a legal system crisis, on top of obviously a medical system crisis. Why legal? 1. The flows of money are contractual Every flow is a contract. Rent, mortgage, other kinds of loans, expenses for utilities, internet, the entire food supply chain, Whatever. All contracts. Nearly all are private contracts- person to person, person to business, business to business. We are talking- hundreds of billions of individual contracts just in the US. At least. 2. Ending a flow means breaking a contract Many of those contracts have termination conditions and remedies and so forth. Many of those conditions are bespoke. Various kinds of courts have authority to handle contract termination and enforcement. We are about a billion courts short of the number needed to deal with this at scale. And the court system simply does not scale- there are no procedures, no mechanisms to deal with these kinds of systemic consequences. 3. There is no legal authority to break them at scale There is simply no legal authority by which those contracts can be terminated. Not Mayors, not Governors, not the President, not the Supreme Court, not Congress- can say- "rent is cancelled" at scale. This is the absolute essence of the American system. It is a system of laws, not of men, our criminal President to the contrary. That is why individual localities are passing "no eviction" laws and so forth that prevent certain kinds of remedies, without impacting the payment requirement itself. 4. There are almost no "terminal" transactions. Even if there was some legal way to nullify those billions of contracts, and there was some way by which the entire legal system did not itself become compromised- so then those flows could be stopped- what then? The reality is that there are no "terminal" transactions. Most rent payments become mortgage payments. Most mortgage payments become interest payments to investors, around the world. Even money that "stops" to sit in a bank account is used as regulatory collateral by the bank in which it sits to create more money. If flows stop into those accounts, the bank falls out of regulatory compliance, has to stop doing its business. Money is like oxygen, like blood. It HAS to circulate for this body public to survive. Stopping the flows means death. The solution to this problem is what Japan is doing- maintain the legal fictions by which society operates using the financial machinery the Bank of Japan knows how to operate. Its balance sheet- which for all intents and purposes is an entity with infinite capacity- can maintain flows indefinitely until the medical system can master this enemy and then everyone can return to their regular business. It is a leap for everyone to understand this- to appreciate this aspect of money that runs contrary to everything we have been told and experience on a personal level. It is not your money, or my money. It is not even our money. For societies of humans, the flow of money is an ecological assumption that we created and have to maintain. We are in need of the Einstein to write the Special Relativity paper that demonstrates that our Newtonian physics understanding of money, as an asset and so forth, while convenient in our ordinary every day lives, is wrong at societal scale.
dillonmckay 7y ago
So how does the local government pay the police, firefighters, sanitation workers, and wastewater treatment plant workers, since property tax revenue is put on hold?
- aembleton 7y ago
  Print the money and give it to local government.

hpoe 7y ago

So I know a guy that he bought some real estate he owns 3 properties I think. He isn't a millionaire just a software engineer working the 9-5 and the properties exist mostly to help him prepare for retirement. Now he has some money set aside so that if one of his properties goes dormant he can cover it for a while, but if he were to lose all three of them at the same time. That would be bad. Then you suggest the government can just buy him out at market rates. Who decides what the market rate is? What if the government decides to value the property for $50,000 less than it is worth? Well suddenly he has just had $150,000 taken from him by the government. When things restabiloxe what do we do then? The government owns tons of housing? Who is going to manage and administer that? If they dump them than all that you've done is transferred the properties from small owners to massive multi-million dollar firms that managed to take the hit. What about people who got laid off and still don't have a job after it is over? Because it was a result of the coronavirus do we just continue to say it's okay don't pay rent? If we do that guarantee a year from now tons of properties won't be paying rent still. It sounds like an easy and simple fix but it is usually more complicated than that and drastic decisions made will often have downsteam effect for years and decades that we can't see now.

ethanbond 7y ago
As far as pricing: simply purchase the properties for whatever their value was last declared on tax forms. Can even add 5-10% for good measure. You lowballed the government to decrease tax burden? No problem, that’s the price you get. This isn’t an anti-millionaire plot, so it doesn’t matter much what he earns. This is a hibernate-then-stimulate plot. We cannot hibernate if businesses and individuals are getting absolutely gutted at the end of each month. We cannot stimulate if stimulus checks are going directly into landlords’ pockets. After this is over, yes, either the government can keep it (as Singapore does) or even sell them back, giving preference to the original owners at the original price (who had been kept employed throughout the hibernation). The land itself is not charging landlords to hold it, so landlords don’t need to be charging tenants to exist on it (except mortgages/taxes, which would be frozen).
- JMTQp8lwXL 7y ago
  In some states (e.g., California) the taxed value is not equal to the market value. Especially for home purchases made decades ago.
  - benrbray 7y ago
    Sounds like a problem that should be fixed by setting the tax value equal to market value.
    - JMTQp8lwXL 7y ago
      Prior to 1978, that was indeed the case. Rising property values were kicking seniors on fixed incomes out of their homes, then Prop 13 was passed.
baby 7y ago
This is the problem when people start treating real estate as an investment when it should be a human right.
- aserafini 7y ago
  I think the problem is individuals treating real estate as a risk free asset (it’s not) and our cultural acceptance of retail investors placing highly leveraged bets (via mortgages) on those assets. If you have a bad portfolio (100% real estate) and you’re highly leveraged, you’re going to have a bad time.
  - WWLink 7y ago
    This sounds most correct to me. A lot of landlords out here see their houses as ATMs and milk them for all its worth. You can't even "take your business elsewhere" because they're all janky and in bad need of a remodel.
ipnon 7y ago
The fairest solution would be for tenants to pay as much as they can instead of the government declaring that all tenants in the nation are incapable of paying the entirety of their rent for the foreseeable future (because this is obviously false, some tenants can pay all or their rent, some of them can pay some of it). You are correct here. The only caveat is that ownership of financial assets including real estate is inherently risky. A monthly rent to retain the right to use a financial asset is in many ways the opposite, both for the reasons of not being liable for the underlying asset in addition to the variety of tenant rights in this county. Your guy assumed these risks when he purchased his 3 properties. An abhorrent attitude is emerging in the United States among the ownership class. They feel they are entitled to steady, eternal returns on their financial assets, equity, real estate or otherwise. Concurrently the labor class has no guarantee of a right to steady, eternal income through sale of their time and energy. In nature, ownership of anything is no guarantee of receiving from it productive benefits. We would be wise as Americans to remember this when we expect anything more from the civil society we inhabit.
- deleted 7y ago
  [deleted]
grecy 7y ago
The comment you replied to suggested freezing all mortgage and rent. So the guy guy know doesn't have to pay the mortgages on the properties and his tenants don't have to pay rent. No need to sell them at all, everything is just on hold.
- pfranz 7y ago
  Mortgages seem a lot simpler to me. You just keep accruing interested and add payments onto the end of the mortgage. With rent there are a few issues--you just get to live there for free? Do you add rent onto the backend (good luck collecting on that)? If you own a property and are renting it out there are other expenses rent covers; sometimes it pays for utilities, it covers insurance, property tax, and maintenance, sometimes it pays the salaries of a property manager or lawn service. One would hope that mortgages are the largest cost and other services could be negotiated with. I think eliminating property tax is infeasible for almost all areas. Depending on the area, that's where a majority of the local government's income comes from and most local governments are not allowed to run a deficit. However, like income taxes, many areas are delaying the due date.
  - TheSpiceIsLife 7y ago
    > keep accruing interested Why? Why does some particular type of business get a free pass to profit from this scenario?
    - pfranz 7y ago
      Loan deferments are already a common practice. Even if you came up with a different accommodation, the point is that mortgages are significantly simpler to address compared to rent.
      - TheSpiceIsLife 7y ago
        I keep seeing people claim that loans should keep accruing interest when people have had their livelihoods evaporate by government degree. My point is: why ya’ll keep saying that? Just freeze the loans. Should be a simple as fuck to implement.
pfranz 7y ago
Item #1 was to cancel mortgage payments and property taxes. This person would only be paying for things like maintenance contracts, lawn service, and insurance. I would think those would be relatively low and all of them are very likely negotiable right now. I know many are proactively reaching out to accommodate. Much like Japan subsidizing 100% of salaries, there would be a timetable for it to sunset since it's obviously can't happen indefinitely. Not that I think that idea is 100% feasible (I don't think states and counties can function without property taxes), but losing an investment seems like a better option than losing where you live. Ideally, "the market" would fix itself. Nobody has leverage here. It's not like there are new tenants waiting to move in and pay rent. So everyone is motivated to renegotiate--unfortunately, the volume of renegotiations often means enforcing silly policies like "evict everyone immediately" might get used. This happened in 2008. I, too, am worried about consolidation. I know that will happen without any action, and will likely happy if the government does.
zebnyc 7y ago
If I buy a stock at $100 with the assumption that there is an upside that it could go to $1000 but the lowest it could go to is $95 cause the government will step in, that is practically a risk free investment. If there is a lesson to be learnt from this crisis and the 2008 housing crash, it is to invest in real estate as a risk free investment. Housing is too big to fail.
- chii 7y ago
  do you know how many people lost their houses during the GFC? housing has never been bailed out. Banks have been bailed out for lending money as mortgages for people who couldn't have ever paid up.
Pfhreak 7y ago
This person has equity in three properties. Are they equally invested elsewhere or did they over leverage their current properties? Because something isn't adding up - either they put all their chips on one number (real estate) or they are playing with a lot more chips than you are suggesting.

anonytrary 7y ago

> Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution necessary. This is something I'm confused about. The US government goes through great lengths to support constituents with an array of welfare programs, but goes through equally great lengths to take a lot of that money back from people. It seems awfully inefficient, and supporting those diametric systems seems like an awful waste of time, energy, and money.

hanniabu 7y ago
It helps increase the income inequality and class gap, so some would say it's very efficient.
dillonmckay 7y ago
It is a means of control and creates white-collar jobs.
granshaw 7y ago
Lobbying and corporate interests has hollowed out our government, simple as that. Great for the markets though, which in turn causes those few who make it into the investing class to vote for more of the same, creating a vicious cycle.

naveen99 7y ago

Just cancelling property taxes would fix rent and protect property values. Rent to property value ratios are much lower without property taxes. Also home ownership rates are much higher without property taxes.

jandrewrogers 7y ago
That depends on where you live. Where I live (Seattle) my property taxes are <1% of property value, but rents are quite high. My property tax bill is probably around 15% of the market clearing rent for my place. Rent would still be damn high.
- naveen99 7y ago
  1% is still very high, compared to 0 in india, U.K., many other places. Rent in india is like 1-2% of property value / year. In texas with 2.5% property tax, rent is closer to 8%. Even Seattle is probably close to 3% / year. Rent is basically property tax + interest rate + maintenance - inflation in property values.

dba7dba 7y ago

>> 2. For landlords who cannot sustain the loss of cash flow, offer to buy them out at market price and then hire them as property managers for their previously owned properties. But who's going to decide on the value? And pay for it? If the goal is to help US population, why not just use that money and give to others with less wealth? Because money given to those without savings will definitely be put back into the economy. A big chunk of money given to one person will most likely sit in a savings acct or something like it...

ethanbond 7y ago
Price is set by the declared value of the land on the most recent tax filings. Add 10% for safe measure. This would cost nowhere close to the trillions of dollars that we’re printing to hand out to large corporations, banks in transaction fees, and then, of the little money that does make its way to consumers, the vast majority of that going straight to landlords.
WalterBright 7y ago
The wealthy have all their money invested in the economy, not Scrooge McDuck cash vaults.

jonahbenton 7y ago

Many people think this way. It is intuitive. It is also mistaken. It is simply not how this incredibly enormous, incredibly complex system has been set up. What is underappreciated is that in contrast to 2008, which was a financial system crisis- what we have now is implicitly a legal system crisis, on top of obviously a medical system crisis. Why legal? 1. The flows of money are contractual Every flow is a contract. Rent, mortgage, other kinds of loans, expenses for utilities, internet, the entire food supply chain, Whatever. All contracts. Nearly all are private contracts- person to person, person to business, business to business. We are talking- hundreds of billions of individual contracts just in the US. At least. 2. Ending a flow means breaking a contract Many of those contracts have termination conditions and remedies and so forth. Many of those conditions are bespoke. Various kinds of courts have authority to handle contract termination and enforcement. We are about a billion courts short of the number needed to deal with this at scale. And the court system simply does not scale- there are no procedures, no mechanisms to deal with these kinds of systemic consequences. 3. There is no legal authority to break them at scale There is simply no legal authority by which those contracts can be terminated. Not Mayors, not Governors, not the President, not the Supreme Court, not Congress- can say- "rent is cancelled" at scale. This is the absolute essence of the American system. It is a system of laws, not of men, our criminal President to the contrary. That is why individual localities are passing "no eviction" laws and so forth that prevent certain kinds of remedies, without impacting the payment requirement itself. 4. There are almost no "terminal" transactions. Even if there was some legal way to nullify those billions of contracts, and there was some way by which the entire legal system did not itself become compromised- so then those flows could be stopped- what then? The reality is that there are no "terminal" transactions. Most rent payments become mortgage payments. Most mortgage payments become interest payments to investors, around the world. Even money that "stops" to sit in a bank account is used as regulatory collateral by the bank in which it sits to create more money. If flows stop into those accounts, the bank falls out of regulatory compliance, has to stop doing its business. Money is like oxygen, like blood. It HAS to circulate for this body public to survive. Stopping the flows means death. The solution to this problem is what Japan is doing- maintain the legal fictions by which society operates using the financial machinery the Bank of Japan knows how to operate. Its balance sheet- which for all intents and purposes is an entity with infinite capacity- can maintain flows indefinitely until the medical system can master this enemy and then everyone can return to their regular business. It is a leap for everyone to understand this- to appreciate this aspect of money that runs contrary to everything we have been told and experience on a personal level. It is not your money, or my money. It is not even our money. For societies of humans, the flow of money is an ecological assumption that we created and have to maintain. We are in need of the Einstein to write the Special Relativity paper that demonstrates that our Newtonian physics understanding of money, as an asset and so forth, while convenient in our ordinary every day lives, is wrong at societal scale.

dillonmckay 7y ago

So how does the local government pay the police, firefighters, sanitation workers, and wastewater treatment plant workers, since property tax revenue is put on hold?

aembleton 7y ago
Print the money and give it to local government.